GIFT   OF 


THE    PROPOSED    RADICAL 
RAILWAY  LEGISLATION 


AN    ADDRESS    DELIVERED   BEFORE  THE   FACULTY 
AND  STUDENTS  OF  THE   UNIVERSITY  OF 
MISSOURI,  OCTOBER  20,  1905 


BY  H.  T.  NEWCOMB, 

Of  the  Bar  of  the  District  of  Columbia, 

Author  of  "  Railway  Economics,"  "  The  Postal  Deficit,"  "  The  Work  of  the 

Interstate  Commerce  Commission,"  "The  Federal  Courts. and  the 

Orders  of  the  Interstate  Commerce  Commission,"  etc.,  etc. 


PRESS  OF  GIBSON   BROS. 

WASHINGTON,  D.  C. 

1905. 


THE    PROPOSED    RADICAL 
RAILWAY  LEGISLATION 


AN    ADDRESS    DELIVERED   BEFORE   THE   FACULTY 
AND  STUDENTS  OF  THE   UNIVERSITY  OF 
MISSOURI,  OCTOBER  20,  1905 


BY  H.  T.  NEWCOMB, 

• 

Of  the  Bar  of  the  District  of  Columbia, 

Author  of  "  Railway  Economics,"  "  The  Postal  Deficit,"  "  The  Work  of  the 

Interstate  Commerce  Commission,"  "The  Federal  Courts  and  the 

Orders  of  the  Interstate  Commerce  Commission,"  etc.,  etc. 


PRESS   OF  GIBSON   BROS. 

WASHINGTON,   D.  C 

1905. 


. 


CONTENTS. 


PAGE 

The  Nature  of  the  Proposal 5 

Not  Intended  to  Prevent  Rebates 6 

Not  to  Prevent  Private  Car  Abuses 7 

Not  to  Prevent  "  Industrial"  Railway  Abuses 8 

Not  to  Prevent  Excessive  Charges 9 

But  to  Control  Competition 10 

An  Effective  Remedy  for  Real  Injustice  now  Exists 12 

Rates  to  be  Advanced  as  Well  as  Lowered 15 

Market  Competition  Controls 16 

Rates  Measured  by  the  Purchasing  Power  of  Money 17 

A  Psychological  Element 17 

A  Task  of  Impossible  Magnitude '. 18 

What  Principle  Would  Govern 20 

The  "Theory  of  Social  Progress" 22 

The  Blight  of  Partisanship 24 

A  Rigid  System 25 

Effect  on  Wages  and  Prices 26 

Unconstitutional 27 

Other  Legal  Difficulties 29 

The  Friendless  Esch-Townsend  Bill 30 

Railways  Not  Obstructive 30 


239450 


The     Proposed     Radical    Railway 
Legislation. 

BY  H.  T.  NEWCOMB. 


THE  NATURE  OF  THE  PROPOSAL. 

The  legislative  proposal  which  we  are  to  consider  is 
the  defendants  in  a  particular  class  of  controversies  shall 
be  compelled  to  submit  to  the  judgment  of  a  tribunal  differ- 
ent in  character  and  in  methods  of  procedure  from  the 
judicial  tribunals  created  under  the  Constitution  and  in 
conformity  with  the  practice  of  all  English-speaking  peo- 
ples. The  demand  is  that  when  the  Interstate  Commerce 
Commission  has  exercised  the  judicial  power  of  determining 
that  existing  rates  are  unlawful,  it  shall,  thereupon,  have 
and  exercise  the  legislative  power  to  prescribe  the  rates 
which  must  in  future  be  applied  between  the  same  places 
and  to  the  same  articles  of  traffic. 

Undoubtedly  this  would  be  a  radical  change  from  existing 
methods,  but  not  because  it  would  effectively  establish 
governmental  power  to  control  railway  charges.  Inter- 
state railways  are  common  carriers,  and  the  principle  that 
the  rates  of  common  carriers  must  be  reasonable  and  just  is 
as  old  as  the  Common  Law.  The  judicial  power  to  award 
damages  for  refusal  to  carry  when  reasonable  compensation 


6 

had  been  tendered  or  for  the  sum  collected  in  excess  of  such 
a  charge  is  much  older  than  the  steam  locomotive. 

Although  jurists  differ  as  to  the  extent  of  the  power  of 
Courts  of  Equity  to  enjoin  unjust  rates,  until  their  usual 
powers  had  been  supplemented  by  statute,  there  is  no  doubt 
that  since  the  adoption  of  the  Elkins  law,  in  1903,  the  Fed- 
eral courts  have  had  the  right  to  issue  an  injunction  against 
"  any  discriminations  forbidden  by  law. ' '  And  the  law  pro- 
hibits every  undue  or  unreasonable  preference  by  which 
one  shipper  or  community  or  class  of  traffic  can  be  given 
an  advantage  over  another. 

The  innovation,  then,  is  not  in  the  end  attempted,  but  in 
the  means  by  which  it  is  proposed  that  the  end  shall  be  at- 
tained. That  the  proposed  step  is  a  radical  departure  from 
the  governmental  practice  which  has  the  sanction  of  Amer- 
ican experience  is,  perhaps,  not  a  reason  for  refusing  to  take 
it,  but  it  certainly  does  impose  upon  those  who  are  to  decide 
the  duty  of  proceeding  with  the  utmost  caution.  Such 
caution  requires  a  minute  inquiry  as  to  the  reasons  for  the 
proposed  innovation  and  its  probable  consequences. 

NOT  INTENDED  TO  PREVENT  REBATES. 

At  the  outset  the  inquirer  meets  with  the  fact  that  the 
proposed  measure  has  no  relation  to  that  particular  evil  of 
railway  practice  which  has  been  most  generally  and  unspar- 
ingly condemned.  Rebates  and  personal  discriminations, 
whereby  one  shipper  may  be  given  an  unfair  advantage  over 
a  competitor,  were  the  primary  cause  of  the  adoption  of  the 
present  Interstate  Commerce  law,  and  there  is  no  doubt 


that  to-day  the  few  belated  instances  of  this  evil  practice 
constitute  the  principal  basis  of  whatever  public  demand 
for  further  restrictive  legislation  really  exists. 

That  there  should  be  favoritism  in  the  charges  for  rail- 
way service  is  intolerable;  it  is,  also,  as  contrary  to  the  law 
of  the  land  as  that  there  shall  be  murder  or  theft.  But 
social  order  is  still  interrupted  by  occasional  larcenies  and 
malicious  homicides,  and  there  is  no  evidence  that  the  law 
against  rebates  is  more  frequently  violated  than  those 
which  forbid  other  offenses.  Yet  if  any  one  can  suggest  a 
modification  of  the  present  law  that  will  more  effectually 
protect  the  public  against  the  direct  or  indirect  preferment 
of  one  shipper  over  another,  through  rebates  or  other  con- 
cessions from  the  published  schedules  of  charges,  the  sug- 
gestion will  become,  promptly  and  without  opposition 
from  any  railway  officer,  a  part  of  the  Federal  statute  law. 

Public  antipathy  to  rebates  ought  not,  however,  to  be 
used  to  further  the  enactment  of  legislation  having  no  bear- 
ing upon  that  subject.  To  confer  rate-making  power  upon 
the  Interstate  Commerce  Commission  could  in  no  way 
hinder  the  payment  of  rebates;  it  would,  on  the  contrary, 
make  illegal  concessions  from  the  published  schedules  the 
only  means  of  approximating  that  elasticity  in  railway 
charges  which  is  essential  to  the  upbuilding  of  industry. 

NOT  TO  PREVENT  PRIVATE  CAR  ABUSES. 

It  is  not  proposed  to  confer  rate-making  power  upon  the 
Interstate  Commerce  Commission  in  order  to  enable  that 
body  more  effectively  to  deal  with  evils  growing  out  of  the 


8 

use  of  private  freight  cars  or  the  incorporation  as  railway 
companies  of  private  side-tracks  and  terminals.  Some  of 
the  owners  of  refrigerator  cars  are  accused  of  charging  ex- 
orbitantly for  their  use  and  for  the  services  rendered  in 
connection  with  them  and  with  other  improprieties  which 
it  is  alleged  are  seriously  detrimental  to  the  industries  they 
purport  to  serve.  Whether  these  allegations  are  justified 
by  the  facts  is  no  part  of  our  present  inquiry.  Whatever 
of  evil  there  may  be  in  a  system  under  which  cars  whose 
owners  are  not  within  the  scope  of  the  Interstate  Commerce 
law  are  permitted  to  be  leased  to  interstate  railways  for  the 
purpose  of  performing  services  in  connection  with  interstate 
traffic,  it  is  obvious  that  they  cannot  be  remedied  through 
Federal  exercise  of  the  power  of  making  rates. 

NOT  TO  PREVENT  "  INDUSTRIAL  "  RAILWAY  ABUSES. 

Similarly,  it  is  charged  that  great  shippers  have  incor- 
porated as  railways  the  side-tracks  erected  at  their  own 
expense  and  leading  to  their  own  factories  and  warehouses, 
and  have  demanded,  and  received,  on  behalf  of  these  pri- 
vately owned  lines,  divisions  of  through  rates  sufficiently 
excessive  to  be  obviously  equivalent  to  rebates.  Such  evi- 
dence as  is  available  concerning  the  character  and  extent  of 
this  practice  conclusively  proves  that  it  is  not  to  be  remedied 
by  government  rate-making.  If  it  is  not,  as  most  lawyers 
believe,  completely  covered  by  existing  law,  any  amend- 
ment likely  to  correct  it  will  be  warmly  welcomed. 


NOT  TO  PREVENT  EXCESSIVE  CHARGES. 

It  is  not  proposed  to  confer  rate-making  power  upon  the 
Interstate  Commerce  Commission  in  order  to  prevent  rail- 
way corporations  from  charging  and  receiving  excessive 
or  exorbitant  rates  for  their  services.  No  other  great  busi- 
ness enterprises  in  the  United  States  are  conducted  for  so 
low  a  return  upon  the  capital  actually  invested  as  the  average 
return  received  upon  railway  stocks  and  bonds. 

The  American  railway  industry  has  drawn  to  itself  much 
of  the  choicest  business  ability  of  the  nation  and  a  body  of 
workmen  whose  high  intelligence  and  exceptional  physical 
excellence  merit  and  receive  the  highest  admiration.  This 
labor  is  highly  paid,  but  not  more  highly  than  it  deserves. 
With  high  wages  and  low  returns  to  investors  American 
railways  have  attained,  relatively  to  their  cost,  the  highest 
efficiency  of  any  railways  in  the  world.  This  efficiency  is 
partially  expressed  in  the  lowest  average  rates  that  any- 
where exist,  rates  which  permit  the  extensive  railway  move- 
ment of  commodities  of  such  low  value  in  comparison  to 
bulk  and  weight  that  if  moved  at  all  on  the  Continent  of 
Europe  it  must  be  in  boats  propelled  along  rivers  or  canals 
by  the  slow  and  painful  efforts  of  the  most  meagerly  com- 
pensated labor.  Repeatedly  have  the  most  persistent 
advocates  of  government  rate-making  recorded  the  fact 
that  they  do  not  base  their  argument  upon  the  allegation 
that  rates  are  generally  excessive.  On  the  contrary,  they 
have  borne  witness,  as  all  fair  and  candid  men  must,  to  the 
exceptionally  low  level  of  rates  which  here  prevails. 


10 

Government  rate-making,  then,  is  not  to  be  resorted  to 
in  order  to  prevent  or  hinder  rebating,  not  in  order  to  re- 
strict the  owners  of  private  cars,  not  in  order  to  limit  the 
evils  of  "  industrial"  railways,  not  in  order  to  secure  a  gen- 
erally lower  level  of  railway  rates.  The  evils  named  are 
those  most  prominent  in  the  public  mind,  but  over  a 
remedy  for  them,  should  it  be  conceived  and  proposed  in 
any  quarter,  there  will  be  no  controversy. 

The  difficulty  is  to  devise  a  more  effective  statute  than 
that  now  in  force. 

BUT  TO  CONTROL  COMPETITION. 

The  real  basis  of  the  demand  for  an  extraordinary  rate- 
making  tribunal,  widely  differing  from  anything  known  to 
our  Federal  system,  is  found  in  the  relations  among  the 
charges  applied  between  competing  markets  and  sources 
of  supply  or  to  competing  articles  of  traffic.  These  relations 
are  now  determined  by  competition;  it  is  proposed  to  make 
them  the  plaything  of  politics. 

Shall  railways  be  required  to  carry  manufactured  articles 
from  St.  Louis  to  Atlanta  at  rates  arbitrarily  proportioned 
to  those  from  New  York  to  Atlanta,  in  accordance  with  the 
decree  of  a  rate-making  board,  or  shall  the  forces  of  com- 
merce be  left  free  to  control  and  progressively  to  modify 
the  relation? 

Shall  government  require  the  rates  on  flour  and  wheat 
from  Minneapolis  to  New  York  to  be  so  adjusted  to  each 
other  as  to  favor  or  to  prevent  the  grinding  of  wheat  for 
European  consumption  at  Minneapolis  or  at  Niagara  or  at 


11 

New  York  or  at  Liverpool,  or  shall  the  relative  charges  be 
those  from  time  to  time  fixed  by  the  natural  operation  of 
the  competition  of  lake  and  canal  and  ocean  and  rail  car- 
riers as  well  as  that  of  the  millers  located  at  the  different 
milling  points  and  the  producers  of  Russia,  Argentine  and 
Germany? 

Shall  the  railway  whose  terminals  are  connected  by  a 
water  route  be  permitted  to  charge  reasonable  compensa- 
tion rate  for  transportation  to  or  from  intermediate  points 
not  served  by  water  carriers  while  still  accepting  traffic 
between  its  terminals  at  the  rates  made  necessary  by  the 
water  competition,  or  must  it  withdraw  from  the  rivalry 
in  the  service  of  its  terminals,  with  the  water  route  and 
thereafter  be  compelled,  in  order  profitably  to  operate,  to 
charge  the  entire  cost  of  its  maintenance,  operation,  taxes 
and  interest  against  its  local  traffic? 

There  is  no  American  community  which  does  not  look 
jealously  upon  some  other  community  with  which  it  is 
maintaining  a  competitive  struggle  for  supremacy  in  the 
industrial  field.  These  competitive  struggles  are  the 
source  of  constant  pressure  upon  the  railways  for  the  read- 
justment of  their  charges,  and  the  story  of  their  acquiescence 
is  to  be  read  in  the  more  than  three  hundred  rate  schedules, 
nearly  all  issued  to  report  reductions,  that  are  received 
every  day  in  the  office  of  the  Auditor  of  the  Interstate  Com- 
merce Commission. 

Every  community  would  like  to  have  its  own  rates  low- 
ered or,  failing  this,  to  have  those  of  competing  commu- 
nities advanced.  To  accomplish  this  result — always  a 
seemingly  reasonable  and  just  result  to  those  to  whom  it 


12 

would  bring  additional  profits — there  is  probably  no  com- 
munity which  would  not  speedily  invoke  the  aid  of  a 
government  rate-making  tribunal  and  none  which  would 
not  bring  to  bear  upon  that  tribunal  every  plausible  argu- 
ment and  every  potent  influence  at  its  command. 

Only  the  extent  of  commercial  rivalry  could  measure  the 
breadth  of  the  task  which  it  is  proposed  to  confer  upon  the 
Interstate  Commerce  Commission.  But  these  competitive 
struggles  are  more  than  a  source  of  demands  for  more 
favorable  adjustment  of  railway  charges.  Restricted,  as 
those  who  seek  these  changes  from  the  railways  under 
present  conditions  are  restricted,  to  commercial  arguments, 
they  may  not  rely  upon  the  carriers  to  protect  them  against 
the  results  of  mismanagement  and  incapacity.  The  com- 
munity which  wishes  industrial  supremacy  must  now  be 
diligent  to  seek,  acute  to  perceive,  and  prompt  to  take 
advantage  of  every  opportunity  to  improve  its  methods 
and  to  cheapen  its  production,  and  none  may  replace  intel- 
ligence and  zeal  by  the  favor  of  the  rate-making  authority. 
If  such  a  substitution  had  been  possible  American  indus- 
trial progress  would  never  have  become  the  marvel  of  the 
world. 

AN  EFFECTIVE  REMEDY  FOR  REAL  INJUSTICE  NOW  EXISTS. 

During  the  present  discussion  the  Interstate  Commerce 
Commission  has  loudly  proclaimed  its  own  impotence.  In 
annual  reports,  in  popular  magazines,  before  scientific 
societies,  at  public  dinners,  in  newspaper  interviews,  and 
in  pamphlets,  the  Commission,  or  some  of  its  members, 


13 

have  asserted  over  and  over  again  that  there  is  no  Federal 
power  sufficient  to  prevent  the  railways  from  exacting 
unreasonable  charges  for  their  services.  Yet  while  these 
assertions  were  being  made  the  Commission,  in  the  per- 
formance of  its  routine  duties,  was  satisfactorily  settling, 
without  litigation  in  the  Federal  courts,  thirty-nine  out  of 
every  forty  cases  of  complaint  brought  to  its  attention. 

The  truth  is  that  there  is  no  genuine  injustice  in  the  rates 
charged  for  interstate  railway  transportation  which  cannot, 
promptly  and  effectively,  be  settled  under  the  existing  law. 
Ninety  per  cent  of  all  the  complaints  brought  to  the  atten- 
tion of  the  Interstate  Commerce  Commission  are  settled 
without  formal  proceedings  of  any  kind.  Of  the  remaining 
ten  per  cent  in  which  formal  proceedings  are  held,  about 
half  have  so  far  been  decided  in  favor  of  the  railways. 
Among,  approximately,  two  hundred  cases  hi  which  the 
Commission  has  decided  that  the  complaining  purchasers 
of  railway  transportation  should  have  relief  the  expression 
of  this  opinion  on  the  part  of  the  Commission  has  been 
sufficient  to  induce  the  railways  immediately  to  make  the 
suggested  changes  in  their  schedules.  In  forty-five  in- 
stances, out  of  four  thousand  complaints  and  in  eighteen 
years,  the  railways  have  believed  that  the  Commission  was 
so  wrong  in  its  conclusions  that  to  follow  its  advice  would 
lead  to  disaster  which  they  would  share  with  their  patrons, 
and  in  these  cases  they  have  resorted  to  their  legal  right  to 
refuse  compliance  with  its  orders  until  those  orders  have 
received  the  sanction  of  a  Federal  court. 

Not  all  of  these  cases  have  been  prosecuted  to  a  conclu- 
sion, but  of  the  thirty-five  cases  actually  decided  the  Com- 


14 

mission  has  been  wholly  sustained    in    only    two    and 
partially  sustained  in  only  one. 

The  conclusion  seems  clearly  to  follow  that  the  ends  of 
substantial  justice  have  been  successfully  attained,  without 
the  intervention  of  the  courts,  in  all  but  three  cases  out  of 
four  thousand  presented  to  the  Interstate  Commerce  Com- 
mission in  the  eighteen  years  of  its  existence,  while  in  the 
three  exceptional  cases  recourse  to  the  courts,  as  provided 
for  in  the  present  statute,  resulted  in  the  enforcement  of  its 
lawful  orders. 

The  fact  is  that  when  the  Commission  has  issued  an  order 
only  two  questions  can  be  considered  by  the  court  which  is 
appealed  to  in  case  obedience  has  been  refused : 

These  questions  are : 

A. — Has  a  lawful  order  been  issued? 
B. — Has  the  order  been  obeyed? 

If  the  first  question  is  answered  in  the  affirmative,  and 
the  second  in  the  negative,  no  latitude  of  action  is  open  to 
the  court.  It  can  neither  revoke  nor  suspend,  neither  alter 
nor  abate,  in  any  degree,  the  order  of  the  Commission,  but 
must  issue  its  decree  commanding  obedience  thereto,  and 
any  carrier  thereafter  refusing  compliance  may  be  punished 
as  for  contempt  of  court.  As  the  present  law  authorizes 
the  Commission  to  command  any  carrier  subject  to  its 
jurisdiction  "to  cease  and  desist"  from  charging  any  rate 
which  is  found  absolutely  or  relatively  unreasonable  and 
provides  this  direct  and  simple  method  for  the  enforcement 
of  its  orders  besides  authorizing  the  alternative  remedy  of  a 
direct  application  to  the  Circuit  Court  for  an  injunction  and 
requiring  special  expedition  in  the  trial  of  this  class  of  cases, 


15 

it  is  difficult  to  see  how  a  more  complete  remedy  for  railway 
abuses  could  be  desired  by  anyone  who  has  sufficient  con- 
fidence in  the  righteousness  of  his  contention  to  be  willing 
to  submit  it  to  a  court  of  justice. 

RATES  TO  BE  ADVANCED  AS  WELL  AS  LOWERED. 

As  the  only  complaints  which  are  urged  in  justification 
of  the  proposed  legislation  are  those  growing  out  of  the  rela- 
tions among  the  rates  charged  for  different  services  it  is 
important  to  observe  that  new  relations  cannot  be  pre- 
scribed by  the  Government  without  withdrawing  from  the 
carriers  the  right  to  lower  their  rates  at  will.  For  example, 
under  an  arrangement  which  has  been  in  force  for  more 
than  twenty  years,  the  inland  rate  on  grain  exported  through 
the  port  of  Baltimore  has  been  three  cents  per  hundred 
pounds  lower  than  that  applied  to  grain  from  the  same 
point  of  origin  exported  through  the-port  of  New  York. 

Last  year  the  railways  reaching  New  York,  under  pressure 
from  those  engaged  in  the  transshipment  of  grain  at  that 
port,  were  perfectly  willing  to  lower  their  rates  to  the  level 
fixed  at  Baltimore,  provided  their  shippers  could  thereby 
gain  the  privilege  of  doing  business  upon  equal  rates  with 
those  enjoyed  by  their  Southern  competitors.  The  contro- 
versy which  ensued  was  referred  to  the  Interstate  Commerce 
Commission,  under  an  agreement  to  submit  to  its  arbitra- 
tion, and  its  award  required  the  carriers  reaching  New 
York  to  observe  a  minimum  limit  upon  their  rates  which 
is  fixed  by  adding  an  arbitrary  differential  to  the  rates  in 
force  at  Baltimore.  Similar  examples  could  be  drawn 


16 

from  the  controversies  over  rate  adjustments  wherever 
they  exist. 

These  differences  cannot  be  settled  through  the  power  to 
prescribe  maximum  rates;  there  must  be  power  to  prevent 
reductions  as  well,  and  if  such  a  power  is  granted  the  United 
States,  through  the  Commission,  will  put  itself  squarely  in 
the  path  of  the  normal  downward  tendency  of  railway 
charges.  This,  of  course,  is  not  the  only  way  in  which  the 
persistent  downward  trend  of  rates  would  be  opposed  by 
the  proposed  legislation. 

MARKET  COMPETITION  CONTROLS. 

It  is  the  competition  of  communities  and  markets,  not 
that  of  rival  routes  between  the  same  points,  .which  has 
produced  the  extremely  low  level  of  railway  rates  that  to- 
day prevails  in  the  United  States.  Thousands  of  railway 
officers  are  daily  meeting  with  tens  of  thousands  of  shippers 
and  considering  how  they  can  promote  the  industrial  wel- 
fare of  the  communities  they  serve  by  revising,  downward, 
their  schedules  of  charges.  The  shipper  explains  to  a  rail- 
way officer  how  a  reduction  in  a  particular  rate  will  enable 
him  to  reach  new  markets  or  to  extend  his  business  in  those 
already  reached,  and  the  latter,  anxious  to  prove  his  effi- 
ciency by  augmenting  the  traffic  secured  through  his  efforts, 
is  very  apt,  in  the  next  scene,  to  appear  before  some  higher 
railway  officer  as  the  advocate  of  the  shipper.  And  when 
the  first  shipper  and  the  first  railway  officer  have  secured 
the  reduction,  through  their  united  efforts,  another  shipper 
and  another  railway  officer,  perhaps  on  the  same  line  of 


17 

railway,  make  the  first  reduction  an  argument  for  a  reduc- 
tion somewhere  else.  Over  and  over  again  the  process  is 
repeated,  each  change  leading  to  many  other  changes,  and 
thus  fraction  by  fraction  the  general  level  of  rates  is  low- 
ered. And  to-day  the  average  rate  is  barely  one- third  of 
the  rate  charged  in  1870. 

RATES  MEASURED  BY  THE  PURCHASING  POWER  OF  MONEY. 

We  must  not  overlook  the  fact  in  this  connection  that  in 
the  last  five  years  the  average  rate,  per  ton  per  mile,  as 
measured  in  money,  has  increased  from  7.24  mills  in  1899 
to  7.80  mills  in  1904.  But  this  apparent  increase  is  so  much 
less  than  the  increase  in  value  of  commodities  generally — 
in  other  words,  it  is  so  much  less  than  offsets  the  decrease  in 
the  value  of  the  money  in  which  the  rates  are  paid — that  it 
is  perfectly  clear  that  the  apparent  increase  is  actually  a 
decrease. 

President  Hadley,  of  Yale  University,  has  recently  said: 

"  It  seems  also  clear  that  the  average  increase  in  rates  is 
apparent  only  and  not  real.  If  the  price  of  goods  carried 
and  wages  of  railroad  laborers  and  the  cost  of  materials  of 
railroad  construction  and  operation  have  increased  from 
ten  to  forty  per  cent,  an  increase  of  apparent  charge  of  five 
per  cent  on  the  part  of  the  railroads  is  virtually  a  tremen- 
dous and  gratifying  decrease." 

A  PSYCHOLOGICAL  ELEMENT. 

But  if  the  Interstate  Commerce  Commission  is  given  the 
power  to  revise  every  rate  of  every  interstate  railway  car- 
rier the  railways  will  be  forced  to  resist  the  appeals  for 


18 

reductions,  knowing  well  that  any  voluntary  change  will  be 
the  cause  of  fresh  complaints  to  the  Commission  from  com- 
peting shippers  or  regions  and  that  one  reduction  will 
always  seem  in  its  eyes  to  be  a  complete  justification  for 
orders  requiring  reductions  elsewhere.  Under  such  cir- 
cumstances the  now  open-minded  traffic  officer,  who  with 
things  as  they  are,  readily  assumes  the  attitude  of  an  advo- 
cate of  the  shipper  who  convinces  him  that  he  can  supply 
increased  traffic  at  reduced  rates,  will  be  transformed  into 
an  advocate  of  every  item  in  every  existing  schedule  and 
an  almost  uncompromising  opponent  of  every  proposed 
reduction.  He  will  know  that  until  driven  to  combat  con- 
fiscatory  taking  of  property  without  due  process  of  law 
before  the  Federal  courts  of  justice  the  revenues  of  the 
property  which  he  serves  will  have  no  protection  except 
that  which  he  and  his  fellow  officers  can  supply. 

Whoever  appreciates  the  importance  of  psychological 
considerations  such  as  this,  in  the  every-day  business  life  of 
the  Nation,  will  not  hesitate  to  affirm  that  the  purchasers 
of  transportation  are  likely  to  fare  better  with  open-minded 
rate-making  officers  than  they  ever  can  with  a  rate-making 
Commission. 

A  TASK  OF  IMPOSSIBLE  MAGNITUDE. 

If  there  were  no  other  impediment  to  the  success  of  such 
a  Commission  the  physical  limit  upon  its  efficiency  would 
be  an  insurmountable  obstacle.  In  the  eighteen  years  of 
its  existence  the  Interstate  Commerce  Commission  has 
received  somewhat  less  than  an  average  of  fifty  formal 


19 

complaints  per  year  and  considerably  less  than  half  of  these 
have  been  prosecuted  to  a  conclusion.  Yet  during  most  of 
its  history  the  Commission  has  been  an  active  and  vigorous 
body.  It  has  labored  diligently  in  hearing  and  considering 
the  cases  presented  to  it  and,  although  from  two  to  four 
years  have  frequently  elapsed  between  the  filing  of  a  com- 
plaint and  the  decision  upon  it,  these  apparent  delays  have 
usually  been  because  the  nature  of  the  cases  presented,  the 
methods  of  procedure  deemed  necessary,  and  the  extent 
and  volume  of  the  relevant  testimony  received  have  ren- 
dered more  rapid  action  impracticable. 

But  the  present  law  offers  no  especial  incentive  to  com- 
plaints which  could  not  stand  the  test  of  judicial  investiga- 
tion. While  the  decisions  of  the  Commission  show  that 
even  in  its  opinion  complainants  have  been  mistaken  as  to 
their  rights  and  as  to  the  obligations  of  the  carriers  in  quite 
half  of  the  cases  presented,  the  law  has  not  constituted  the 
Commission  the  general  rate-making  authority  for  all  the 
railways  of  the  country  and  mere  desires  for  advantages  in 
commercial  rivalry,  unless  supported  by  some  evidence  of 
injustice  in  the  existing  schedules,  have  not  commonly 
resulted  in  additions  to  its  docket  of  complaints.  In  the 
proposed  statute,  however,  no  such  restraint  would  exist. 
The  rate-making  power  of  the  Commission  would  be  in- 
voked wherever  there  appeared  to  be  a  chance  to  secure  an 
advantage  through  its  agency  and  its  docket  would  promptly 
be  congested  with  cases  which  it  would  not  have  time  to 
hear.  At  the  same  time,  the  statute-made  reluctance  of 
railway  officers  to  grant,  hi  lawful  form,  concessions  such 
as  those  which  are  freely  granted  at  the  present  time, 


20 

would  create  an  apparent  necessity  for  the  interference  of 
the  Commission  where  no  such  condition  now  exists. 

WHAT  PRINCIPLE  WOULD  GOVERN. 

Another  inquiry  ought  certainly  to  be  made  before  the 
proposed  step  is  taken.  If  railway  rates  are  to  be  made  by 
governmental  authority,  upon  what  principle  is  that  au- 
thority to  act?  The  commercial  principle  now  governs; 
ought  some  other  principle  to  be  substituted?  Are  busi- 
ness and  industrial  conditions  those  which  should  be  ex- 
pressed in  railway  tariffs  or  are  there  "social  considerations 
that  should  modify  or  replace  those  that  now  control? 

Rates  to-day  are  the  resultants  of  the  competitive  con- 
flict of  commercial  or  business  forces,  the  action  and  inter- 
action of  which  the  successful  railway  officer  studiously 
observes  but  cannot  control.  The  rate-schedules  register 
these  results.  Thus,  with  certain  imperfections  of  detail, 
but  always  tending  toward  a  more  perfect  adaptation  to 
the  needs  of  business,  the  general  body  of  railway  rates  is, 
under  current  conditions,  a  product  of  commerce. 

It  seems  almost  absurd  to  suggest  that  the  intervention 
of  government — that  is,  of  a  political  body  operating  by 
political  means  and  controlled  by  political  necessities — 
could  bring  about  a  more  perfect  expression  of  commercial 
conditions.  Yet  the  testimony  taken  by  the  committees 
of  Congress  during  the  past  year  shows  that  there  are  sincere 
advocates  of  this  legislation  w  ho  would  utterly  condemn  the 
adjustment  of  rate  schedules  on  any  other  basis  than  that 
of  industry  and  trade.  One  of  these  advocates  of  political 


21 

rate-making  proposed  the  adjustment  of  rates  upon  a  mile- 
age basis,  and  most  of  them  argue  that  the  element  of  dis- 
tance ought  to  be  given  greater  weight  than  it  is  in  the 
existing  schedules.  Some,  however,  utterly  rejected  the 
mileage  basis,  correctly  concluding  that  it  would  be  de- 
structive to  American  industry  and  prosperity — particu- 
larly that  of  the  great  West — and  without  proclaiming  any 
principle  which  should  govern  the  action  of  such  a  commis- 
sion, contented  themselves  with  the  reiterated  suggestion 
that  the  present  schedules  contain  imperfections  of  greater 
or  less  magnitude.  It  seems  fairly  obvious  that  a  govern- 
ment rate-making  tribunal  must  act,  if  it  acts  at  all,  upon 
some  principle  of  sufficiently  general  character  and  appli- 
cation to  afford  to  the  public  mind  a  readily  appreciable 
justification  for  its  course.  If  there  is  any  factor  in  rail- 
way transportation,  other  than  those  of  weight  and  dis- 
tance, which  would  serve  this  purpose  it  has  not  been 
brought  to  my  attention. 

It  seems,  then,  that  if  a  Commission  endowed  with  rate- 
making  power  should  attempt  to  act  in  accordance  with 
commercial  considerations  it  will  be  forced,  in  greater  or 
less  degree,  to  neglect  the  more  potent  forces  of  competition 
and,  proportionately,  to  substitute  rates  arbitrarily  based 
upon  mileage.  This  simple  expedient  of  the  distance  tariff, 
with  more  or  less  modification,  has  been  the  refuge  of  most 
State  commissions  having  rate-making  power,  and  recourse 
to  it  has  been  the  common  result  in  those  countries  of  Eu- 
rope which  own  their  railways  or  in  which  the  governments 
strictly  control  the  charges  of  private  companies. 


22 


THE  "THEORY  OF  SOCIAL  PROGRESS." 

The  present  Commission,  however,  does  not  believe  that 
railway  rates  can  be  properly  adjusted,  to  use  its  own  lan- 
guage, "independently  of  the  theory  of  social  progress. " 
This,  of  course,  means  the  particular  "theory  of  social 
progress"  that  may  be  held  at  any  particular  time  by  the 
then  majority  of  any  particular  commission. 

There  are  many  theories  of  social  progress — there  is  the 
Democratic  theory  and  the  Republican  theory.  Mr.  Roose 
velt  has  one  theory;  his  recent  Democratic  opponent, 
Judge  Parker,  has  another,  and  Mr.  William  J.  Bryan,  of 
Nebraska,  has  one,  from  which  the  President  of  the  United 
States  has  evidently  borrowed.  If  rates  are  to  be  made  in 
accordance  with  a  "theory  of  social  progress,"  it  will  be 
very  important  to  know  who  is  going  to  select  the  Commis- 
sion to  apply  the  theory  and  whose  theory  is  to  be  applied. 

The  theory  of  the  present  Commission  was  expressed  in 
an  annual  report  as  follows: 

"To  give  each  community  the  rightful  benefits  of  loca- 
tion, to  keep  different  commodities  on  an  equal  footing,  so 
that  each  shall  circulate  freely  and  in  natural  volume,  and 
to  prescribe  schedule  rates  which  shall  be  reasonable,  just, 
to  both  shipper  and  carrier,  is  a  task  of  vast  magnitude  and 
importance.  In  the  performance  of  that  task  lies  the  great 
and  permanent  work  of  public  regulation." 

Pray,  what  are  the  "rightful"  and  what  the  wrongful 
"benefits  of  location?"  What  is  the  "natural  volume"  in 
which  live  stock  should  move  from  Columbia  to  St.  Louis, 


23 

and  what  is  that  in  which  boots  and  shoes  should  move 
from  St.  Louis  to  Columbia? 

In  similar  vein,  but  with  more  definiteness  of  expression, 
Mr.  Commissioner  Prouty  writes  (in  the  Forum  for  April, 
1899): 

"  My  proposition  is  that  the  business  of  railway  transpor- 
tation is  so  far  a  function  of  government  that  the  United 
States  is  bound  to  see  that  every  individual,  every  industry, 
every  locality,  no  matter  how  humble  or  insignificant,  en- 
joys the  advantages  to  which  he  or  it  is  fairly  entitled,  and 
that  he  or  it  is  not  crushed  out  of  existence  by  the  exigencies 
of  competition."* 

The  discriminating  will  not  find  it  possible  to  speak  of 
such  a  conception  of  government  as  paternalistic. 

But  how  sweet  must  seem  the  proposed  motherly  cod- 
dling of  incapacity  to  the  consciously  incapable  and  the 
hopelessly  indolent.  Unwillingness  to  be  crushed  out  of 
existence  by  the  exigencies  of  competition  gives  impulse  to 
all  industry  and  is  the  source  of  all  material  progress.  To 
relieve  the  slothful  and  inefficient  in  business  of  this  dread 
would  penalize  diligence  and  capacity  and  condemn  poster- 
ity to  drudgery  from  which  protection  through  the  continu- 
ance of  normal  progress  is  already  clearly  foreshadowed. 
Yet  the  introduction  of  any  considerations  other  than  those 
of  commerce  must  mean  that  the  natural  operation  of  the 
forces  of  competition  is  to  be  mitigated  either  for  the  bene- 
fit of  some  of  those  whom  it  would  cripple  or  destroy  or  for 
the  further  aggrandizement  of  some  of  those  to  whom  pro- 
tection is  superfluous. 

*The  italics  are  the  present  writer's. 


THE  BLIGHT  OF  PARTISANSHIP. 

Would  a  political  commission  be  able  to  avoid  the  intro- 
duction of  partisan  considerations  in  the  settlement  of  con- 
troversies that  are  usually  between  communities  and  there- 
fore geographical  and  at  times  sectional?  The  typical 
railway  controversy  when  this  suggestion  is  under  con- 
sideration is  that  concerning  the  distribution  of  export 
grain  tonnage  between  the  Gulf  and  the  Atlantic  ports. 
The  railways  reaching  Galveston  and  New  Orleans  are 
maintaining  with  increasing  success  a  stupendous  struggle 
for  a  larger  share  of  export  trade  and  every  increment  of 
traffic  which  they  secure  contributes  its  share  to  the  indus- 
trial upbuilding  of  the  South.  One  of  the  first  tasks  which 
would  be  set  before  a  rate-making  commission  would  be  the 
determination  of  the  relation  between  the  rates  charged  to 
the  Gulf  ports  and  those  charged  to  New  York  and  Boston. 
If  that  question  should  be  submitted  to  the  present  Com- 
mission it  would  go  before  a  body  which  contains  but  one 
Southern  member,  and  in  which  New  England  and  New 
York  have  two  representatives  of  great  ability  and  influ- 
ence. It  would  also  go  before  a  body  whose  majority  had 
been  selected,  in  accordance  with  the  law,  from  that  politi- 
cal body  which  never  anticipates  success  in  any  of  the 
Southern  States. 

Is  it  in  the  nature  of  things  that  the  relations  of  locality 
and  of  partisanship  should  have  no  influence  upon  the 
result?  If  it  shall  come  to  pass  that  the  favor  of  the  Inter- 
state Commerce  Commission  is  of  great  value  to  communi- 


25 

ties  competing  for  industrial  success,  how  long  will  it  be 
before  those  interested  will  make  its  control  the  especial 
object  of  political  controversy?  This  is  precisely  what  has 
happened  in  most  of  the  States  which  have  had  rate-making 
commissions  long  enough  for  an  effective  test. 

A  RIGID  SYSTEM. 

It  is,  of  course,  obvious  that  the  creation  of  a  government 
rate-making  body  would  constitute  a  threat  of  interference 
which  would  give  pause  to  the  activities  of  the  railway 
officers  now  engaged  in  making  those  daily  adjustments  of 
rates  to  changing  conditions  which  have  been  one  of  the 
incidents  of  our  commercial  progress  and  that  no  commis- 
sion could  possibly  move  fast  enough  to  make  those  adjust- 
ments. The  question  is  raised,  therefore,  whether  such 
elasticity  in  rate-making  as  now  exists  is  or  is  not,  desirable. 

That  such  elasticity  is  not  inconsistent  with  real  pros- 
perity, is,  of  course,  beyond  question.  Whether  it  is  essen- 
tial to  such  progress  is  an  inquiry  which  can  best  be  ad- 
dressed to  the  business  men  of  the  country.  Many  of  them 
have  recently  appeared  before  committees  of  Congress  and 
it  is  noteworthy  that  without  exception  they  have  testified 
that  their  business  has  grown  up  through  the  friendly  and 
lawful  co-operation  of  rate-making  officers. 

We  know,  too,  that  if  low  railway  rates  are  desirable 
there  is  no  way  to  attain  them  except  through  the  multi- 
farious changes  which  result  from  such  elasticity  as  we  now 
enjoy.  Drastic,  arbitrary,  reductions  imposed  by  govern- 
ment authority,  would  not  be  an  effective  substitute. 


26 

Without  the  gradual  increase  in  the  volume  of  traffic  which 
springs  from  gradual  and  intelligently  applied  reductions, 
such  changes  would  be  confiscatory  and  therefore  they 
would  be  enjoined  by  the  court. 

The  rigidity  of  government  rate-making  would  in  a  very 
large  degree  crystallize  the  organization  of  industry  and 
substitute  for  our  present  intensely  dynamic  economic  con- 
dition a  static  system. 

EFFECT  ON  WAGES  AND  PRICES. 

Regulation  of  railway  rates  is,  of  course,  indirect  regula- 
tion of  railway  earnings.  Some  of  those  who  proposed 
such  regulation  seem  to  be  of  the  opinion  that  in  one  way 
or  another  the  returns  upon  railway  capital  are  excessive. 
How  this  opinion  can  be  held  in  spite  of  the  statistical  proof 
to  the  contrary  is  not  perhaps  of  present  importance.  It 
follows,  however,  that  if  the  indirect  control  of  earnings 
reduces  them  below  the  point  at  which  the  necessary  capi- 
tal for  extensions  and  maintenance  can  be  annually  at- 
tracted to  the  railway  industry  there  must  be  a  modification 
of  the  rates  of  wages  and  the  prices  of  supplies.  In  this 
way  the  regulation  of  the  rates  charged  for  service  must 
become,  sooner  or  later,  and  of  necessity,  a  regulation  of 
wages  and  prices. 

The  traditional  ineffectiveness  of  government  in  these 
directions  perhaps  suggests  that  there  may  be  related 
difficulties  in  the  effort  to  prevent  the  sale  of  railway  trans- 
portation for  what  it  is  worth.  The  suggestion  is  only 
introduced  now  in  order  to  inspire  inquiry  as  to  whether 


27 

justice  to  those  who  operate  and  own  railways,  working- 
men  and  investors,  does  not  forbid  political  interference 
with  the  railway  industry  unless  other  industries  are  simi- 
larly treated. 

UNCONSTITUTIONAL. 

It  is,  of  course,  perfectly  clear  that  the  power  which  it  is 
proposed  to  confer  upon  the  Interstate  Commerce  Com- 
mission is  legislative  in  its  character  and  can  be  exercised 
only  within  the  limits  in  which  it  is  possible  for  Congress  to 
delegate  its  authority.  The  general  principle  controlling 
is  that  legislative  power  cannot  be  delegated.  One  of  the 
highest  American  authorities,  Judge  Cooley,  has  said: 

"  One  of  the  settled  maxims  in  constitutional  law  is  that 
the  power  conferred  upon  the  legislature  to  make  laws  can- 
not be  delegated  by  that  department  to  any  other  body  or 
authority.  Where  the  sovereign  power  of  the  State  has 
located  the  authority,  there  it  must  remain;  and  by  the 
constitutional  agency  alone  the  laws  must  be  made  until 
the  constitution  itself  is  changed.  The  power  to  whose 
judgment,  wisdom  and  patriotism  this  high  prerogative 
has  been  intrusted  cannot  relieve  itself  of  the  responsibility 
by  choosing  other  agencies  upon  which  the  power  shall  be 
devolved,  nor  can  it  substitute  the  judgment,  wisdom  and 
patriotism  of  any  other  body  for  those  to  which  alone  the 
people  have  seen  fit  to  confide  this  sovereign  trust." 
(Cooley's  Constitutional  Limitations,  141,  4th  edition.) 

The  only  recognized  limitation  upon  this  principle,  which 
really  is  not  a  limitation  at  all,  is  that  when  the  legislature 
prescribes  a  rule  of  general  character  it  may  confer  upon  a 


28 

subordinate  tribunal  the  duty  of  ascertaining  the  facts  and 
details  necessary  for  the  application  and  enforcement  of 
that  rule.  It  is  scarcely  to  be  contended,  however,  that 
the  requirement  that  rates  shall  be  reasonable  and  just,  both 
absolutely  and  relatively,  is  sufficiently  specific  as  a  rule  of 
conduct  to  permit  the  delegation  of  the  power  to  determine 
what  rates  meet  with  those  conditions.  If  such  a  rule  adds 
anything  to  the  Common  Law,  which  is  a  controverted 
point,  it  at  least  cannot  be  supposed  that  in  its  absence  a 
commission  to  which  rate-making  power  has  been  delegated 
would  have  the  right  to  make  rates  that  were  unreasonable 
and  unjust. 

If  Congress  should  see  fit  to  prescribe  a  mileage  basis  for 
rates  or  to  set  up  a  sufficiently  specific  standard  of  any  char- 
acter there  is  no  doubt  that  it  might  appoint  a  commission 
to  ascertain  what  rates  were  consistent  with  the  standard. 
Congress  will  not  attempt  to  do  so,  and  it  is  not  believed 
that  such  a  general  delegation  as  that  now  proposed  would 
survive  the  test  of  an  examination  by  the  Supreme  Court 
of  the  United  States.  So  far  as  the  present  occasion  is  con- 
cerned, however,  I  have  done  all  that  I  have  intended  if  I 
have  suggested  to  you  that  the  argument  against  the  exist- 
ence of  the  power  to  delegate  rate-making  authority  in  the 
manner  now  urged  is  of  sufficient  weight  to  make  certain 
that  the  question  would  have  to  be  judicially  determined. 
When  a  clearly  constitutional  means  to  an  end  exists  or  is 
available  there  can  be  no 'controversy  over  the  fact  that  it 
is  unwise  to  select  a  means  the  enactment  of  which  would 
lead  to  prolonged  litigation. 


29 


OTHER  LEGAL  DIFFICULTIES. 

Even  if  Congress  were  directly  to  exercise  the  rate-mak- 
ing power  which  it  may  be  assumed  to  possess  any  rates 
prescribed  by  its  authority  could  be  questioned  in  the  courts 
upon  the  contention  that  they  amounted  to  taking  property 
without  due  process  of  law,  or  that  they  afforded  a  prefer- 
ence to  the  ports  of  one  State  over  those  of  another.  These 
limitations  upon  the  power  to  regulate  commerce  fixed  in 
the  Fifth  Amendment  to  the  Constitution  of  the  United 
States  are  not  only  a  limitation  upon  the  power  of  Congress 
but  they  would,  of  course,  limit  the  power  of  any  body  act- 
ing under  authority  from  Congress.  The  ports  of  the 
United  States  are  not  only  the  harbors  along  its  coasts,  but 
are  many  of  them  inland  towns  to  which  imported  traffic 
may  be  shipped  before  duties  are  collected. 

It  is  scarcely  possible  to  conceive  of  any  important  con- 
troversy as  to  the  adjustment  of  railway  rates  which  would 
not  involve  the  fixing  of  the  relations  among  the  rates  to 
the  ports  of  two  or  more  States  and  in  every  such  case  the 
question  whether  a  preference  contrary  to  the  Constitution 
had  been  granted  would  be  one  which  could  be  brought 
before  the  courts.  The  possibilities  for  litigation  under 
this  head  alone  are  very  great  indeed.  If  they  do  nothing 
else,  they  require  us  to  consider  whether  it  is  not  possible 
to  present  this  class  of  cases  like  all  other  cases  to  the  courts 
of  law  and  equity  in  the  first  instance,  for  they  make  it 
certain  that  most  of  them  will  have  to  be  judicially  ex- 
amined before  they  are  settled. 


30 


THE  FRIENDLESS  ESCH-TOWNSEND  BILL. 

It  is  interesting  to  observe  that  those  who  advocate  gov- 
ernment rate-making  have  apparently  no  fixed  views  as  to 
the  form  which  such  regulation  should  take.  The  so-called 
"  Esch-Townsend  Bill/'  which  passed  the  House  of  Repre- 
sentatives by  the  vote  of  an  overwhelming  and  obviously 
insincere  majority  is  not  now  advocated,  even  by  those 
whose  names  it  bears.  It  has  been  publicly  and  enthusias- 
tically abandoned  by  all  of  those  most  active  in  the  advo- 
cacy of  rate-making  legislation,  and  of  the  five  members  of 
the  Interstate  Commerce  Commission  who  appeared  during 
last  June  before  the  investigating  committee  of  the  Senate, 
none  spoke  a  word  in  its  favor.  The  President  of  the  Cattle 
Raisers'  Association,  the  ablest  of  those  who  are  urging 
legislation,  has  described  it  as  worse  than  no  law. 

Yet  the  Esch-Townsend  bill  is  the  lineal  descendant  of  a 
long  series  of  bills  which  have  been  successively  abandoned. 
What  form  will  be  assumed  by  the  new  measure,  which  is 
to  be  introduced  when  Congress  convenes,  it  is  impossible 
to  predict,  but  one  may  be  certain  that  the  criticisms  of  its 
predecessors  will  be  shown  to  have  resulted  in  many  modi- 
fications. 

RAILWAYS  NOT  OBSTRUCTIVE. 

The  falsehood  that  the  railways  of  the  country  are  de- 
fiantly and  obstinately  opposing  the  will  of  the  people  has 
obtained  dangerously  extensive  credence.  Against  it  could 
be  set  the  repeated  declarations  of  many  of  the  ablest  lead- 


31 

ers  of  the  railway  world,  but  I  shall  quote  only  from  Mr. 
Samuel  Spencer,  President  of  the  Southern  Railway,  and  a 
director  of  many  other  great  railways.  Speaking  at  Pitts- 
burg,  Mr.  Spencer  said: 

"  *  *  *  if  methods  can  be  found  *  *  *  by 
which  the  great  railway  question  of  the  day  can  be  settled 
in  accordance  with  law  and  equity  and  in  accordance  with 
those  fundamental  principles  of  government  which  are 
guaranteed  by  the  Constitution,  I  speak  with  authority 
when  I  say  that  substantially  every  railway  manager  in  the 
country  will  subscribe  to  that  view  and  aid  in  the  accom- 
plishment of  the  desired  result.  *  *  *  It  is  not  reason- 
able regulation  to  which  the  carriers  object;  it  is  to  unwise 
and  unfair  regulation.  It  is  not  the  regulation  which  seeks 
directly  to  remedy  known  and  tangible  evils,  but  it  is  the 
so-called  regulation  which,  while  ostensibly  attacking  one 
evil  or  class  of  evils,  inflicts  unknown  and  unjustifiable 
injuries  upon  those  who  are  not  offenders,  and  that  which 
undertakes  unnecessarily  to  interfere  with  the  legal  and 
beneficial  freedom  of  commercial  action  and  enterprise  and 
thus  to  diminish  the  future  usefulness  of  the  carriers  and 
impede  the  material  development  of  the  country.  It  is 
not  the  regulation  which  improves  but  it  is  the  regulation 
which  confuses  and  retards." 

It  is  to  be  hoped  that  when  the  discussion  is  over,  if  legis- 
lation should  be  adopted  (and  it  is  not  my  purpose  to  con- 
tend that  the  present  law  cannot  be  improved)  that  what- 
ever statute  is  enacted  will  be  conceived  in  the  spirit  of  the 
following  expression  of  President  Roosevelt : 

"  It  must  not  be  forgotten  that  our  railways  are  the  ar- 
teries through  which  the  commercial  life-blood  of  this  na- 


32 

tion  flows.  Nothing  could  be  more  foolish  than  the  enact- 
ment of  legislation  which  would  unnecessarily  interfere  with 
the  development  and  operation  of  these  commercial  agen- 


And  if  another  word  of  guidance  is  needed,  may  it  not  be 
found  in  the  words  of  Thomas  Jefferson : 

"Agriculture,  manufactures,  commerce  and  navigation, 
the  four  pillars  of  our  national  prosperity,  are  the  most 
thriving  when  left  most  free  to  individual  enterprise. " 


N.Y. 


